In the first edition of CRYPTO TREND we introduced Crypto Currency (CC) and answered several questions about this new market space. There is a lot of NEW in this market every day. Here are some highlights that give us an idea of how new and exciting this market space is:
The world’s largest futures exchange for creating a Bitcoin futures contract
Terry Duffy, president of the Chicago Mercantile Exchange (CME), said: “I think you’ll see in the second week of December our [bitcoin futures] recruit for the list. Currently, you cannot short bitcoin, so there is only one way. You buy it or sell it to someone else. So you create a two-sided market, which I think is always much more efficient.”
CME plans to launch Bitcoin futures by the end of the year, pending regulatory review. If successful, it will give investors a viable way to go “long” or “short” Bitcoin. Some sellers of Exchange-Traded Funds have also introduced bitcoin ETFs that track bitcoin futures.
These developments allow people to invest in the cryptocurrency space without owning CC or using the services of a CC exchange. Bitcoin futures can make the digital asset more useful by allowing users and brokers to hedge their currency risks. This could increase adoption of the cryptocurrency by merchants who want to accept bitcoin payments but are wary of its volatile value. Institutional investors are also used to trading regulated futures, which do not have money laundering concerns.
CME’s move also suggests that bitcoin has become too big to ignore, as the exchange seemed to ignore crypto futures in the recent past. Bitcoin is all anyone is talking about in brokerage and trading firms, which have suffered amid a bullish but unusual market. If futures were to take off on one exchange, it would be nearly impossible for any other exchange, like CME, to move forward, as scale and liquidity are important in derivatives markets.
“You can’t ignore that this is becoming more and more of a story that’s not going to go away,” Duffy said in an interview with CNBC. There are “major companies” that want access to Bitcoin and there is “high demand” from customers, he said. Duffy also believes that bringing institutional traders into the market could make bitcoin less volatile.
Japanese people use cryptocurrency to raise capital for municipal revitalization
The Japanese town of Nishiawakura is investigating an Initial Coin Offering (ICO) to raise capital for municipal revitalization. This is a very innovative approach, and they can seek support from the national government or seek private investment. Several ICOs have run into serious problems, and many investors are skeptical that any new tokens will have any value, especially if the ICO turns out to be another joke or scam. Bitcoin was definitely no joke.
INITIAL COIN OFFERING – ( ICO )
We didn’t mention ICO in the first edition of Crypto Trend, so let’s mention it now. Unlike an Initial Public Offering (IPO), where a company has an actual product or service for sale and wants to buy shares in their company, an ICO can be held by anyone who wants to start a new Blockchain project with the intention of creating it. a new token on their chain. ICOs are not regulated and there have been several scams. A legitimate ICO, however, can raise a lot of money to fund a new Blockchain project and network. It is common for an ICO to generate a high token price near the beginning and then return to reality soon after. Since having an ICO is quite easy if you know the technology and have a few dollars, there have been many, and today we have about 800 tokens in play. All these tokens have a name, they are all cryptocurrencies, and except for the very popular tokens like Bitcoin, Ethereum and Litecoin, they are called alt-coins. At this time Crypto Trend does not recommend participating in an ICO, as the risks are very high.
As we said in #1, this market is the “wild west” right now, and we advise caution. Some investors and early adopters have made huge profits in this market space; however, many, if not all, have lost. Governments are looking at regulations because they want to know about every transaction in order to tax them all. Everyone is heavily in debt and strapped for money.
So far, the cryptocurrency market has avoided many of the financial problems and pitfalls of government and conventional banks, and Blockchain technology has the potential to solve even more problems.
A great feature of Bitcoin is that the creators chose a limited number of coins that can ever be created – 21 million – thus ensuring that this cryptocurrency can never be inflated. Governments can print as much money (fiat currency) as they want and inflate their currency to death.
Future articles will delve into specific recommendations, however, make no mistake, early investing in this sector is only for your most speculative capital, money you can lose.
CRYPTO TREND will be your guide if and when you are ready to invest in this market space.